The Reserve Bank of India (RBI) said on Friday that in the week ending October 24, the country’s foreign exchange reserves declined by a huge $ 6.92 billion to $ 695.35 billion. Last week, reserves had risen by $4.49 billion to an all-time high of $702.28 billion.
Where did this decline come from?
According to RBI data, foreign currency assets, the largest component of foreign exchange reserves, declined by $3.86 billion to $566.54 billion. These assets also include the impact of changes in the value of other currencies such as the dollar, euro, pound and yen. In the week under review, gold reserves decreased by $ 3.01 billion to $ 105.536 billion. Additionally, Special Drawing Rights (SDR) also declined by $58 million to $18.66 billion. However, India’s reserves with the International Monetary Fund (IMF) increased by $6 million to $4.608 billion during the same period. According to experts, this decline in foreign exchange reserves was mainly due to fluctuations in other major currencies against the dollar and RBI intervention.
Rupee stable at 88.69 against dollar
After minor fluctuations throughout the day on Friday, the Indian rupee closed steady at 88.69 (provisional) against the US dollar. Weakness in domestic stock markets and strengthening of the American currency were the main reasons for this decline. The rupee opened at 88.60 per dollar at the interbank foreign exchange market and touched a high of 88.59 and low of 88.78 during the day. Ultimately it remained stable at its previous closing level of 88.69 per dollar. On Thursday, the rupee had closed at the same level with a fall of 47 paise.
The dollar index, which gauges the dollar’s performance against six major currencies, rose marginally 0.04 per cent to 99.39. Domestic equity markets also remained weak – Sensex fell 465.75 points to 83,938.71, while Nifty fell 155.75 points to 25,722.10. Brent crude, the benchmark of the international oil market, fell 0.68 percent to $ 64.56 per barrel. Meanwhile, according to stock market data, foreign institutional investors (FIIs) remained sellers on Thursday and sold shares worth Rs 3,077.59 crore.